Binance Denies Being Hacked, as CEO Confirms “All Funds are Safe”
The head of Binance has officially denied rumors that the exchange was hacked on Wednesday, claiming that “irregular trades” have now been fixed. Speculation that the exchange might have been hacked triggered a sharp reversal in the fortunes of most major cryptocurrencies.
The company’s CEO Changpeng Zhao reassured traders Wednesday that their accounts had not been compromised.
“We have localized the irregular trades, they will be reversed. All funds are safe, thanks to the fast alarm. Please learn to secure your accounts against phishing,” he tweeted Wednesday afternoon.
Users took to Reddit, Twitter and other social media channels on Wednesday to report highly suspicious activity on their Binance accounts. Several traders reported that their altcoins were suddenly liquidated without prior warning or consent. Oddly enough, the loss of altcoins was associated with a massive spike in Viacoin (VIA), a relatively obscure cryptocurrency that more tripled in value on Wednesday.
Following the reports, Binance quickly froze trading and withdrawals to investigate the matter further. The loss of coins seems to inflict accounts with registered API keys, which are used to enable trading bots. The exchange issued a follow-up statement informing traders that the Binance platform had not been compromised:
“As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.
Please remain patient and we will provide an update as quickly as possible.”
Fears of a coordinated cyber breach made for a highly turbulent session in the crypto markets. The total value of all crypto assets briefly plunged by more than 10% as traders rushed to exit their positions.
Cyber Security Remains a Major Concern
Crypto exchanges are routinely the target of sophisticated cyber attacks, a trend expected to intensify as digital currencies rise in value. Attackers have already made off with billions of dollars worth of stolen cryptocurrencies over the years.
It was just last month that Japan’s Coincheck was drained of $500 million in NEM after hackers successfully redirected the coins into alternate account. The heist was the biggest the market had ever seen, surpassing the 2014 attack of Mt Gox.
Exchanges have stepped up their security guidelines in response to the wave of attacks. This includes adopting stricter KYC/AML requirements and reminding users how to better safeguard their accounts.
Hacking attempts aren’t just limited to exchanges. It has been estimated that roughly 10% of all ICO funds have been compromised by cyber criminals. With billions flowing into the ICO market, that’s no small number.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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